Clamping down on the abuse of open policies of insurance

Posted on: 25 January 2013

Clamping down on the abuse of open policies of insurance

The Police tell us that there is a proven link between driving without insurance and crime, and recognise that dealing with uninsured vehicles can have a positive impact on disrupting criminality. With uninsured drivers being more likely to be involved in collisions, MIB’s work with the police to clamp down on this type of lawbreaker is not only an effective way of making our roads safer but also in catching criminals.

Issues around the abuse of open policies

A topical subject of widespread police concern relates to issues around the abuse of open policies of insurance or "open certificates” (also widely referred to as "motor trade certificates”). An open policy of insurance is a legitimate way of the insurance industry doing business, providing an effective way of covering the business of a legitimate motor trader; giving them the flexibility to deal in multiple numbers of vehicles, whether they are in vehicle sales, repair, or any other genuine form of the trade.

The vast majority of open policies are for legitimate use within the motor trade. However, experience amongst the police has shown that an increasing number of these policies are being misused. In general terms this abuse is most likely to occur with small businesses or sole traders, where, in some instances sole traders are not legitimate motor traders and are abusing an open certificate of insurance that may have been obtained inappropriately or does not cover the specific use of the vehicle. There is also evidence that open policies of insurance are being used fraudulently by organised crime groups.

The police have been very successful in reducing the number of uninsured vehicles on the road through the use of Automatic Number Plate Recognition technology and seizure powers. However, the misuse of open policies appears to be a convenient way for criminals to try and avoid law enforcement and its consequences.

Tackling the issue

The Joint Open (Trade) Working Group established in 2010 between the police and motor insurers to look at all aspects of the use of open certificates such as those commonly issued to motor traders has instigated a number of outcomes to help tackle this issue, including:

• Production of a guide to assist police forces in dealing effectively with open policies of insurance
• A number of recommendations to the motor insurance industry improving the wording of open certificates of insurance
• Recommendations regarding data held on the Motor Insurance Database (MID)
• An agreed way forward in respect of data sharing and serious organised crime

MIB’s work with UK police forces

MIB continues to work closely with police forces across the country to help tackle this issue. In addition to offering its usual catalogue of free support materials, information is tailored and delivered directly to police teams by the Bureau’s Police Liaison Manager, Dean Smith, conducting on-site workshop briefings.

The training package

A recent example of how this practical framework for minimising the abuse of open policies of insurance can be adapted came last month when Strathclyde Police played host to some intensive insurance training led by Dean Smith and MID Account Manager, Amy Mickley, who spent four days with the Force in Glasgow.

MIB was invited to work with the Force by Chief Superintendent Paul Main, Head of the Operations Department, who saw the opportunity to raise the awareness of his officers across a wide range of insurance related subjects; and the abuse of open policies by criminal elements in particular.

Over the course of the four days Dean and Amy delivered six, two-hour training sessions. Four of these occasions were immediately followed by operational assistance as the officers went out on the street of Glasgow for a live police roadside check.

This training package, which contains over an hour on open polices of insurance, has been welcomed by police forces across the country. Although this was the first time it had been combined with practical roadside assistance in the same day.

Dean commented: "The training on open polices has been developed as a result of the work done with insurers and police and is built around the working group publication, Dealing with Open Policies of Insurance (Motor Trade): Good Practice Guide for the Police (MIB: 2012) which is given to officers for their future reference.”

Achieving results

Feedback from the Strathclyde officers was extremely positive. At the roadside the MIB staff had direct access to the MID via handheld devices which proved particularly effective in resolving any conflicting accounts given by drivers. The MIB Police Helpline was also used to verify insurance cover.

During the roadside checks a total of ten vehicles were seized by the police immediately in relation to no insurance with a further four dealt with later for similar offences.

Next steps

Members of the Joint Open (Trade) Working Group met most recently on 12 December 2012 to update the police guidance document and look at other ways of reducing the abuse of open policies.

For further information or to request MIB Police support materials, please visit (via police force intranet) or email